The company evolved out of a company owned by Sangor. In the mid-1930s, Sangor and Richard E. Hughes began to produce a short-lived prepackaged comics supplement for newspapers. In 1939, the Sangor Shop (as it was informally known) began producing comics for Sangor's son-in-law Ned L. Pines. The Sangor Shop produced the characters and stories of The Black Terror, Pyroman, and Fighting Yank for Pines' Nedor Comics and produced most of the comics for Pines until 1945.

In 1943, ACG started to publish its own work under such names as B&I Publishing, Michel Publications and Regis Publishing. It acquired the publisher Creston Publications in 1943, making Creston into an ACG imprint.[7] By 1948, it was publishing comics under the name of American Comics Group. Its titles were typical of the times, including horror, crime, mystery, romance, and funny-animal comics. In 1948, it began publishing the long-running horror title Adventures into the Unknown.[8] This was the first of a trilogy of ACG horror/supernatural titles that also included Forbidden Worlds (1951–1967) and Unknown Worlds (1960–1967).

In 1949, ACG began publishing two long-running romance titles, Romantic Adventures (later changed to My Romantic Adventures), and Lovelorn (later changed to Confessions of the Lovelorn). Both titles lasted into the 1960s.

An October 1, 1952 "Statement of the Ownership, Management, and Circulation" published in ACG's Forbidden Worlds #15 gave its publisher's name as Preferred Publications, Inc., 8 Lord St., Buffalo, New York" and the owners as Preferred Publications and "B. W. Sangor, 7 West 81st Street, New York, N. Y." The editor was listed as Richard E. Hughes, 120 West 183rd St., New York, N. Y." and the business manager as "Frederick H. Iger, 50 Beverly Road, Great Neck, Great Neck, L. I., N. Y."[9] An October 1, 1950 statement published in ACG's Cookie #29 gives identical data, with the exception of the publisher and co-owner being listed as "Michel Publications, Inc. 420 DeSoto Ave., St. Louis 7, Mo..[10]

Almost all stories after 1957 were written by editor Hughes under a variety of pseudonyms. Besides the satirical superhero the Fat Fury, other ACG superheroes of the period known as the Silver Age of Comic Books included Magicman (starting in Forbidden Worlds #125), Nemesis in Adventures into the Unknown (starting with #154),[11] and John Force, Magic Agent, in his own title in 1962, then later in Unknown Worlds (#35, 36, 48, 50, 52, 56), with a few stories in Forbidden Worlds (#124, 145) and Adventures into the Unknown (#153, 157).